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2019 (9) TMI 1689 - AT - Income TaxChargeability of interest received under the Land Acquisition Act - compulsory acquisition of land - As per assessee it is capital receipt and not chargeable to tax - whether interest which was received under section 28 of LAC Act is to be treated as part of compensation or not? - HELD THAT:- Hon'ble Supreme Court in CIT Vs. Ghanshyam (HUF) [2009 (7) TMI 12 - SUPREME COURT] and in other cases had held that interest awarded under section 28 of LAC Act was in the nature of solatium and was an integral part of compensation. Also further held that interest received under section 34 of LAC Act was on account of delayed payment of compensation and was revenue receipt. Though the amounts received under sections 28 and 34 of LAC Act are termed as interest but two stands at different pedestal in so far as the Income Tax Act is concerned. Such is the proposition laid down by Pune Bench of Tribunal in Shri Madhav Pandharinath Kande Vs. ITO [2019 (7) TMI 1928 - ITAT PUNE]. The Hon’ble Apex Court in CIT Vs. Chet Ram (HUF) [2017 (9) TMI 1532 - SUPREME COURT] talks of the year of taxability which is not in dispute. In the totality of the same, we allow the plea of assessee that interest received under section 28 of LAC Act is to be treated as part of compensation and is not to be charged as income from other sources in the hands of assessee. Thus, modified grounds of appeal raised by assessee are allowed.
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